Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Archive for October 2011

Competition Law Everywhere

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I often tell my studs that there’s competition law everywhere.

Here’s an example, found this morning when reading the news at breakfast.

In several recent lectures, I have explained that the case-law insulates organs with “exclusively social functions” from the ambit of the competition rules. This is especially the case of social schemes that operate under the solidarity principle (ECJ, C-159/91 et C-160/91, Poucet and Pistre).

In France, the “mutualités” (complementaty social schemes) have recently announced their intention to collectively raise prices, to pass-on tax increases decided by the Government. I suspect that some of them do not operate under the solidarity principle, and might thus not benefit from the above exception. Needless to say that any coordinated plan to increase prices could be akin to an unlawful concerted practice or decision by associations of  undertakings under Article 101 TFEU.

Moreover, it seems that the governement does not force them to pass-on the price increase (in which case they could benefit from the act of State defense). Hence, the sole economic situation in which 100% repercussion would be unavoidable, is where the “mutualités”  already price at marginal costs. Otherwise, if they make a profit, they can take part (or all) of the tax increase on their profits. In this case, they should compete on the tax increase absorption. A joint decision to transfer it on consumers should thus be forbidden, in that it chills competition.

Now off to watch France v. Wales

Written by Nicolas Petit

15 October 2011 at 9:58 am

Posted in Uncategorized

Reforming the EU General Court

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Last week, the European Commission adopted a formal position on the reform of EU Courts. The document refers to both the ECJ and the General Court, but for the moment we will focus on the latter as the main subject of the proposed reform.

The Commission´s position advocates for the appointment of 12 new Judges to the General Court (which would make a total of 39) as well as for the creation of at least two new specialised chambers (one of which would most likely be devoted to competition cases). These reforms are aimed at addressing the enormous workload that the General Court currently faces (with over 600 new cases registered every year and ever growing delays).

The Commission´s proposal -which to a great extent endorses that of the President of the ECJ, Mr. Skouris- has now been circulated to the Parliament and to the Council.

Unsurprisingly, the most contentious issue that has arisen in the context of the ongoing discussions between Member States relates to the designation and nationalities of the new Judges. As you know, the method for the designation of Judges falls entirely upon Member State, which have always acted on the basis of informal consensus. The Commission, fully aware of the fact that abandoning the principle of equal representation would be tough to swallow for some Member States, has attempted to tackle the issue by proposing two alternative methods of designation (see recitals 42-50 of the document that appears in the link above). In our view, the merits of the candidates should weigh much more than their nationality, and therefore the second option proposed by the Commission appears to be preferrable.

We feel nonetheless, that several important issues remain unaddressed:

First, whereas the nationality of the Judges may certainly be important, there is another very relevant nationality factor at the General Court that has so far gone unnoticed.

What would you say is the percentage of French référendaires (clerks) at the General Court?   Under a system of equal representation, the answer should be approximately 4%. In real life, that number is however…..40%!

We know some truly excellent French référendaires, and of course French is the working language at the Courts, but, as a mater of principle, when it comes to judging shouldn´t quality and credentials matter more than language abilities? (I´m using “we”, but maybe Nico, being a froggy French citizen sees things differentlly…) 😉

Secondly, there is nothing the Commission can do about designations of candidates at the national level. The Committee envisaged in Art. 255 TFEU has certainly helped by acting as minimum filter in the most flagrant cases. Nonetheless, some Member States may still be tempted by the possibility of appointing candidates on grounds other than those strictly technical (although the second option proposed by the Commission has the virtue of perhaps shifting those incentives).

In our view, Member States should ideally follow the Dutch example (we believe that other Member States are already doing it). They arranged a merit-based competition and eventually appointed two outstanding Judges such as Sacha Prechal (ECJ) and Marc van der Woude (GC).

Written by Alfonso Lamadrid

12 October 2011 at 9:54 pm

Posted in Case-Law, Uncategorized

Chillin´Competition: The Conference

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As our usual readers know by now, this blog was born out of the conviction that it was possible to do and say some things differently within our small competition law world. We have intended to do that on the blog, and now we want to extend this attitude to a conference  -the 1st Chillin´Competition conference- which will be somehow different from what you may be used to. We can´t say much more for now (except that it will be held in Brussels), but details will follow soon.

We want you to be involved to the greatest extent possible, and therefore we would like you to please send us your ideas on possible topics and speakers: we´re looking for excellent and open minded practitioners, officials or academics who might give brilliant, fresh and even humorous views on competition law issues. We already have ideas on a number of people who fit that description, and some of them have already expressed their willingness to participate in this initiative. Please send us your suggestions either publicly by commenting on this post or in private at nicolas.petit@ulg.ac.be and alfonso.lamadrid@garrigues.com

Thanks!

Written by Alfonso Lamadrid

11 October 2011 at 8:12 pm

Hammering out Public Restrictions of Competition

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Article 101 and 102 TFEU have little grip against public restrictions of competition.

Of course, Article 4(3) TEU, read in conjunction with Articles 101 and 102 TFEU may provide a legal basis to challenge public restrictions of competition in the context of infringement proceedings. But to date, the Commission has been understandably reluctant to take Member States to Court. And to  the best of our knowledge, the Italian matches case-law (ECJ, Consorzio Industrie Fiammiferi (CIF), C-198/01), which compels NCAs to declare such measures inapplicable, has been little applied in practice.

With this background, it will often fall on “positive integration” measures (read EU regulations) to remove public restrictions of competition. In connection with this, my research assistant Norman Neyrinck recently informed me of an interesting ECJ ruling  that I had overseen.

In  Société fiduciaire nationale d’expertise comptable v. Ministre du Budget, des comptes publics et de la fonction publique (C-119/09) the Court found that Directive 2006/123 on services in the internal market (AKA the “Bolkestein Directive“) “ought  be interpreted as precluding national legislation which totally prohibits the members of a regulated profession, such as the profession of qualified accountant, from engaging in canvassing“.

This is likely to have profound practical implications, given the wide substantive scope of the services directive. Other regulated professions (legal services?) may no longer apply bans on advertising to their members.

And this is likely to also have important cultural consequences. See video hereafter:

Written by Nicolas Petit

7 October 2011 at 9:09 pm

Posted in Case-Law

Tougher Competition Law

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The day before yesterday, in Joined Cases C‑403/08 and C‑429/08 (Premier League), the Court of Justice :

(i) failed to understand what a public good is;

(ii) further expanded the “object” box.

And a proposition: would I be a monopolistic supplier (like FAPL), I’d sell to one buyer only in the EU, at a very high price.  Or I’d sell to all of them, at a very high, similar price (to limit arbitrage).

This case has been presented as a victory for market integration. I am afraid this is more of a knock-out.

Written by Nicolas Petit

6 October 2011 at 8:10 am

Posted in Case-Law, Uncategorized

GCLC Lunch Talk on VEBIC and Tele2 Polska

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I am very pleased to announce a new GCLC lunch talk on “The Rights, Powers and Duties of NCAs following the ECJ Judgments in VEBIC and Tele2 Polska“.

It will take place on 24 October. Time and place as usual. Online registration available here.

We have invited E. Sakkers (DG COMP), F. Zivy (French Competition Authority) and S. Brammer (University College Leuven) to discuss those fascinating cases.

Some background documentation can be found here.

Written by Nicolas Petit

5 October 2011 at 1:59 pm

Antitrust Story

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Like theft, monopoly pricing does not necessarily harm total welfare, but injures consumer welfare.

Depending on where you stand on the total v. consumer welfare equation, this may influence your social tolerance to theft.

A good illustration of this can be found in a story about William Baxter, a former Professor at Stanford Law School. Baxter  also served from 1981 to 1983 as Assistant Attorney General in charge of the Antitrust  Division of the DoJ:

While strolling one evening on a quiet street near the Washington residence, Bill and his wife Carol were confronted by an armed robber; they emerged minus some personal property but without injury. At the next Antitrust Division holiday party, the incident became a skit in which the robber demanded Bill’s watch. When Bill resists, the robber points out that it would be only a wealth transfer – a mere redistribution that would not affect economic efficiency or total social welfare. Reassured that the robber shares his standards of economic analysis and acknowledging that the point is analytically correct, Bill immediately surrenders his watch”.

Source can be found here. Found in reading Ben Van Rompuy’s doctoral dissertation (VUB, Belgium).

Written by Nicolas Petit

4 October 2011 at 12:28 am

Posted in Jokes, Uncategorized